On February 12th, Ohio Governor John Kasich released his budget proposal (HB 59) to foster job creation and enhance Ohio’s economy. HB 59 includes new tax provisions that will affect Ohio businesses. One main provision included in the bill is to reduce the sales tax rate from 5.5% to 5% and to start taxing services including:
- legal
- accounting
- parking lots
- haircuts
- insurance
Take a look at this chart from the Governor’s office to see the full list of taxable services.
Because the sales tax would be expanded, the budget would also reduce local sales tax rates of many Ohio counties and transit authorities, and a three-year moratorium would be place on any local sales tax increases.
Also included in HB 56 are the following tax reforms:
- $2.1 Billion dollar income tax cut, which is a 20% cut over three years.
- $1.9 Billion small business tax cuts over three years. The income tax on nearly all Ohio small business would be reduced by 50% on the first $750,000 of earnings.
- Eliminate severance taxes for small-volume natural gas providers, and the taxes will change from 20 cents-per-barrel to a flat tax of 4%. This increase will help fund the new tax cuts.
To learn more about HB 59, please click here.